Case law

  • Case Details
    • National ID: II 420/2000
    • Member State: Denmark
    • Common Name:Flemming Sølvsten Automobiler A/S versus Daniel Navne
    • Decision type: Other
    • Decision date: 04/01/2002
    • Court: Højesteret (Supreme court)
    • Subject:
    • Plaintiff:
    • Defendant:
    • Keywords:
  • Directive Articles
    Unfair Contract Terms Directive, Article 6, 1. Unfair Contract Terms Directive, Article 6, 2.
  • Headnote
    The case concerned the fairness according to the Formation of Contract Act § 38 c, cf. § 36 (implementing art. 6 of the Directive) of a contract term authorizing the seller to charge 10% of the contract price in case of cancellation of the purchase of a car
  • Facts
    A consumer bought a used car, price 72.750 DKK, and signed a preformulated standard form contract prepared by Denmark’s Car Dealer Association. According to one of contract terms the dealer was entitled to charge 10 % of the contract price as damages in case of the buyer’s unjustified cancellation of the contract
    A few days after signing the contract the consumer cancelled the contract. Referring to the said contract term the dealer claimed 7.275 DKK.
    The case was brought before the Consumer Complaints Board, then before the Maritime and Commercial Court in Copenhagen and ended in the Supreme Court. The case was decided in favour of the consumer in all instances.
  • Legal issue
    the consumer was bound by the contract and the 10% - clause was part of the contract between the parties;
    in cases concerning the buyer’s breach of a sale contract concerning a used car it is in general not possible for the seller to prove a loss of profit etc. recoverable as damages according to the Sales of Goods Act;
    on this background, the said 10% - clause would often lead to the result that the buyer be obliged to pay a disproportionately high sum in compensation to the seller.
    therefore, the term must be set aside as unreasonable according to § 38 c, cf. § 36 of the Formation of Contract Act, see also 1,(e) i of the Annex to art. 3 in Directive 93/13/EEC;
    the seller was not excluded from demanding damages according to the Sales of Goods Act; however, the seller did not succeed in proving that he suffered a recoverable loss of profit etc.

    The decision of the minority (two Supreme Court judges) had the same result as the majority’s but was based on the finding that the consumer was not bound by the contract at all.
  • Decision

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